Earn up to
$50000
for inviting friends
to get StartUp Bonus
from InstaForex
No investments required!
Start trading without
any investments and risks
WITH NEW STARTUP
BONUS 1000$
GET BONUS
55%
from InstaForex
on every deposit
  • Amazed
  • Amused
  • Angelic
  • Angry
  • Asleep
  • Bashul
  • Bitchy
  • Blah
  • Bored
  • Breezy
  • Brooding
  • Busy
  • Buzzed
  • Chatty
  • Cheeky
  • Cheerful
  • Cold
  • Confused
  • Cool
  • Crappy
  • Cynical
  • Daring
  • Dead
  • Devilish
  • Doh
  • Doubtful
  • Drunk
  • Fine
  • Flirty
  • Goofy
  • Grumpy
  • Happy
  • Hot
  • Hungover
  • Innocent
  • Inspired
  • In_Love
  • Lonely
  • Lurking
  • Mellow
  • Paranoid
  • Pensive
  • Psychedelic
  • Relaxed
  • Sad
  • Scared
  • Shocked
  • Sick
  • Sleepy
  • Sneaky
  • Stresses
  • Tired
  • Twisted
  • Worried
  • Yeehaw
  • Reply to thread
    Page 1 of 12 1 2 3 6 ... LastLast
    Results 1 to 10 of 119

    Thread: [Overview] Margin, Margin level, Free margin, Margin call and Stop out.

    1. #1
      FX Zombie
      I am:
      ----
       
      Kadiri is just really nice Kadiri is just really nice Kadiri is just really nice Kadiri is just really nice Kadiri's Avatar
      Posts
      2,695
      Accumulated bonus
      685 USD (What is this?)
      Thanks
      106
      Thanked 366 Times in 147 Posts

      Default [Overview] Margin, Margin level, Free margin, Margin call and Stop out.

      Can anyone tell us what is the difference between a Margin Call and a Stop Out, or are they the same thing?


    2. Thanks under the first post will be ignored for the purpose of distribution of prizes
    3. #2
      FX Zombie
      I am:
      ----
       
      Kadiri is just really nice Kadiri is just really nice Kadiri is just really nice Kadiri is just really nice Kadiri's Avatar
      Posts
      2,695
      Accumulated bonus
      685 USD (What is this?)
      Thanks
      106
      Thanked 366 Times in 147 Posts

      Default

      I was hoping to have had many answers to this question but since there is none yet, here is my answer.

      Margin call and stop out are often confused one with the other. A lot of traders (not all), think that a margin call is the same thing as a stop out. Often they refer to Margin call as the fact that their account was emptied of all funds as the result of a bad trade. Actually, that was not a margin call, it was a stop out and depending on the stop out level of your broker, you can lose all your money as the result of a bad trade.

      So what is the MARGIN CALL and what is the STOP OUT.

      MARGIN CALL
      This is the warning that your broker gives to you to tell you that the totality of your open trades have fallen below the required percentage of the total allowed margin and you are being called to do one of three things viz (1) Close the very bad trades and leave open the not so bad trades (2) Close all trades at loss and wait for better opportunity with smaller equity or (3) Add more money to your trading account to increase your margin and stop the margin call alert.

      STOP OUT
      A stop out is when the broker totally closes your open trades that have gotten to the stop out level. The stop out level usually a percentage set by the broker and made known to traders and it is the level at which the broker cuts trades that have fallen below the required margin requirement. When a stop out occurs, the worse trades are closed off first and then the other trades are closed when they also hit the stop out level.

      THE DIFFERENCE.

      The Margin call is simply a warning (FLASHING RED) asking to deposit more funds or close the trades before they are stopped out, while a Stop out is a the actual closing of all open trades by the broker when they fall below the stipulate stop out level. So when next you lose all your money, it is not a margin call you but you got a stop out because you did not heed the margin call warning.


    4. For the posts posted after 25.02.19 the likes will be displayed after 25.04.19.
    5. #3
      Moderator
      I am:
      Angelic
       
      Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces has a reputation beyond repute Passionate Pisces's Avatar
      Posts
      14,761
      Thanks
      29,794
      Thanked 29,309 Times in 7,362 Posts

      Default

      Thread closed as the contest has ended..


    6. #4
      MT5 Super Moderator
      I am:
      Devilish
       
      MT5 bozZdeviL has disabled reputation MT5 bozZdeviL's Avatar
      Posts
      24,041
      Thanks
      21,863
      Thanked 31,521 Times in 7,513 Posts

      Default

      If the money in your account (we call as Balance) falls below the requested margin (margin that can be use), the broker will close some or even all current orders. That means broker are prevents the trader account from falling into a negative balance, usually it is happen in a moment of highly volatile, gap and fast moving market.

      In order to avoid and make us far away from the margin call or even stop out, we must limit the risk of loss each time we enter position in the market it can be use stop loss option, regardless of any trading strategy we use. If we not limiting our risk of loss that means we are trading by risking all funds we have in our trading account for each order we have in the market. Trading without limiting the risk (stop loss option) is same with driving car with maximum speed but without having a brakes so that means it is very dangerous. Without using stop loss, disaster will come to us, margin call or even stop out will visit our trading accounts.
      Experienced traders will suggest risk ratio ranging from 2% to 10% of current equity (not a balance).
      The calculations of Equity is Balance + Floating profit or loss
      Floating profit is an open position in profit and visa versa Floating loss is an open position that is being loss.
      If there is no open position then it's called Equity, Equity is same with Balance.


    7. For the posts posted after 25.02.19 the likes will be displayed after 25.04.19.
    8. #5
      Banned
      I am:
      ----
       
      Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah has a reputation beyond repute Neriah's Avatar
      Posts
      1,252
      Accumulated bonus
      1339 USD (What is this?)
      Thanks
      7,387
      Thanked 6,679 Times in 1,093 Posts

      Default

      Well the difference is that margin call is the point where your money cannot sustain the position that you have opened while trading, maybe we even need to understand the concepts of margin first, when you enter the market with your small capital, the forex broker usually gives you an extra boost through leverage and margins so that with your small balance you are able to trade with much higher account value, but a time comes when this falls significantly to the extent that the forex broker assistance is threatened, it is at this point that they will decide to withdraw their support and your account suffers from margin call.

      Stop out means you can still trade after your account has reached some levels by adjustment of your leverage, whereas with a margin call, that is not possible because every thing is gone.


    9. For the posts posted after 25.02.19 the likes will be displayed after 25.04.19.
    10. #6
      Banned
      I am:
      Daring
       
      Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90 has a reputation beyond repute Leonvic90's Avatar
      Posts
      2,310
      Accumulated bonus
      2274 USD (What is this?)
      Thanks
      10,464
      Thanked 8,294 Times in 1,666 Posts

      Default

      There is no difference between a stop out and margin call, they are basically the same and can be used interchangeably, even if there is any difference between these two concepts, none of them is positive and as traders that wants to be successful, we cannot allow our account to be so low that it falls at the risk of being annihilated. Risks management is crucial you must never take this for granted.

      Stop out means you set up a stop loss and you got stopped from the market when you position was hit in negative, but a margin call can be described as the total wiping of your account, a stop out can be a margin call at the same time, it depends on our trading lot, whether we used the right size is a determining thing that could make us lose our account unduly.

      IIf you are sure you want your account to experience some real growth, never jeopardize the opportunity to earn from the next trading opportunity by using a higher lot than is necessary for the safety of your money.


    11. For the posts posted after 25.02.19 the likes will be displayed after 25.04.19.
    12. #7
      My charts talk to me!
      I am:
      ----
       
      わξΨǐ ツ is a splendid one to behold わξΨǐ ツ is a splendid one to behold わξΨǐ ツ is a splendid one to behold わξΨǐ ツ is a splendid one to behold わξΨǐ ツ is a splendid one to behold わξΨǐ ツ is a splendid one to behold わξΨǐ ツ is a splendid one to behold わξΨǐ ツ's Avatar
      Posts
      907
      Accumulated bonus
      329 USD (What is this?)
      Thanks
      1,717
      Thanked 774 Times in 345 Posts

      Default

      If a trader do not know what is Margin call then that is the warn from Broker to tell us about the totality of all order we open on the market fallen under procentage of the total allowed margins. When our order flashing red in the order coloumn, that what we can do is reinvest or closed some order we have. Before creating new trading account we should know or read the trading rules of the Broker you choose because usually Broker will explain the level of margin you have from the leverage option you will use. The explanation of Stop out can be found among the trade rules. Stop out occurs if we ignore the warning from Margin call.


    13. #8
      Banned
      I am:
      ----
       
      sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark has a reputation beyond repute sonibark's Avatar
      Posts
      8,473
      Accumulated bonus
      3950 USD (What is this?)
      Thanks
      4,081
      Thanked 14,521 Times in 3,492 Posts

      Default

      In my own opinion and with what I have experience a margin call can occurs when there are not enough funds in your trading account to open trades.
      but most of the time traders knows this and they wouldn't bother to open a trade

      And this also happen mostly when our floating losses are greater than the minimum margin required.

      And then we will get notification from our brokers to replenish our account

      And stop out is when all open position may are closed at some certain level ranging from broker to broker, just to protect our trading capital, spend brokers do this when their client capital reduce up to 50% bit I don't think instaforex offers this


    14. For the posts posted after 25.02.19 the likes will be displayed after 25.04.19.
    15. #9
      Banned
      I am:
      ----
       
      simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola has a reputation beyond repute simisola's Avatar
      Posts
      6,666
      Accumulated bonus
      3122 USD (What is this?)
      Thanks
      14,728
      Thanked 11,589 Times in 2,929 Posts

      Default What is the difference between Margin, Margin Level(%) and Free Margin?

      Whenever we are trading, as soon as we execute the trade we will see some parameters that appears automatically, I don't seem to understand how these are calculated, there will be margin, free margin and margin level or percentage, can anyone that understand explain each of these terms to me?
      Attached Images  


    16. For the posts posted after 25.02.19 the likes will be displayed after 25.04.19.
    17. #10
      My charts talk to me!
      I am:
      ----
       
      Renan is a glorious beacon of light Renan is a glorious beacon of light Renan is a glorious beacon of light Renan is a glorious beacon of light Renan is a glorious beacon of light Renan's Avatar
      Posts
      728
      Accumulated bonus
      540 USD (What is this?)
      Thanks
      577
      Thanked 524 Times in 324 Posts

      Default

      Brokers give traders to understand about the margin call the following line in the terminal is highlighted in red
      Margin call is the critical level at which a trader brokers a signal about the need to fill your account for future opportunities to trade. If the funds are not deposited into the account, and the free margin rate will fall even lower, then come forward and the final stage for the Deposit trader stops (stop out). Stop is the trader's rate of funds, Deposit (free margin) under the terms of the broker unable to block any further losses. At the end of the contract to open a trader's account see that if it reaches stop out level, the trade will be blocked. This is called the stop-out rate. It should be noted that if you have multiple trades open, stop (stop out) is not instantaneous. At first, the broker will increase the rate and increase your margins for free by taking turns forcing the closing of the transaction. This will allow the merchant some time to keep the position open. But if the loss will continue to grow, it will consistently close all trades, and trade will be blocked.


    18. For the posts posted after 25.02.19 the likes will be displayed after 25.04.19.
    Reply to thread
    Page 1 of 12 1 2 3 6 ... LastLast

    Tags for this Thread

    Posting Permissions

    • You may not post new threads
    • You may not post replies
    • You may not post attachments
    • You may not edit your posts